In the early morning of the 23rd Beijing time, the US stock market was basically flat on Wednesday afternoon. The Nasdaq set a new record in the session. Investors pay attention to the latest batch of US stock financial reports, including Nvidia. The Federal Reserve will release the minutes of its last monetary policy meeting today.
The Dow fell 73.87 points, or 0.19%, to 39799.12; The Nasdaq Composite Index fell 1.59 points, or 0.01%, to 16831.03; The S&P 500 index fell 4.93 points, or 0.09%, to 5316.48.
The Nasdaq rose to 16853.36, the highest point in the session.
The US stock earnings report became the focus. retailer Target The profit was lower than expected, and the management said that the consumption expenditure trend of non necessities was weak. The retailer's performance was in trouble, triggering widespread concerns about the health of American consumers.
The stock price of clothing retailer Urban Outfitters rose, and the company's revenue and profit in the latest quarter exceeded expectations.
The performance of Toll Brothers, a housing builder, exceeded analysts' expectations and raised the annual housing delivery guidance.
Nvidia will release its first fiscal quarter results after the close of the US Eastern Time on Wednesday, and analysts expect the chipmaker to submit a strong quarterly performance report again. According to the data of the London Stock Exchange (LSEG), the market generally estimates that the company's profits and revenues will increase by 400% and 240% year on year.
Investors will pay close attention to Nvidia's financial report to find out whether the rebound of technology stocks this year can be sustained.
According to Wall Street estimates, the company's revenue is expected to grow by 243%, but the stock price has risen by 90% so far this year, which means that the company may be difficult to meet high expectations.
With the growing influence of Nvidia on the broader market, Nvidia's earnings will provide the latest test for the rebound of the US stock market. Since this year, the US stock market has pushed all indexes to record highs.
As Nvidia's chips are the gold standard in the field of artificial intelligence, its performance is widely regarded as a barometer of the emerging artificial intelligence industry. The development of this industry has stimulated the enthusiasm of investors and helped promote the bull market of the U.S. stock market.
Deutsche Bank analysts said: "This is a key event. It seems strange for the market to focus on a company's performance, but in recent quarters, the company's performance release has become one of the most important events on the macroeconomic calendar."
Tuesday, tech stocks dominated NASDAQ The composite index reached a record high. The index has risen 12% so far this year.
Liz Ann Sonders, chief investment strategist of Credit Suisse Financial, said that although the rising trend of US stocks may extend to sectors other than technology stocks, the first financial reporting season of US stocks must end with a strong tone.
She said: "We really need to keep the corporate financial statements in good condition, because last year's financial statements were all about the expansion of multiples (pricing models that use subjective or objective multiples to determine the value of assets or companies), and this expansion is not conducive to corporate profits. I think corporate profits really need to continue to catch up with the growth of pricing multiples."
On the economic data side on Wednesday, the National Association of Realtors (NAR) reported on Wednesday that the sales of second-hand houses in the United States in April fell 1.9% from March, and the seasonally adjusted annual figure fell to 4.14 million units. The market had predicted that the number would increase slightly.
The sales of second-hand houses in April also decreased compared with April 2023 - 1.9% lower than the same period last year.
The sales of second-hand houses are calculated based on the turnover, so the sales contract of the above-mentioned second-hand houses may be signed in February and March.
At the beginning of February this year, the interest rate of mortgage loans for housing purchase in the United States jumped, remained at about 7% in the next two months, and then rose further in April.
Traders will also pay attention to the minutes of the last monetary policy meeting held by the Federal Reserve from the end of April to the beginning of May.
Traders have lowered their expectations for the Federal Reserve to cut interest rates this year. Currently, they expect to cut interest rates by about 40 basis points in 2024, while last week they expected to cut interest rates by 50 basis points. The minutes of the Federal Reserve's last policy meeting, which are scheduled to be released later on Wednesday, may provide more clues to understand the thoughts of interest rate makers.
The minutes of the meeting should confirm that the next interest rate action of the Federal Reserve is still likely to be lowered, but policy makers need to have more confidence in the recovery of downward trend of inflation.
Federal fund futures suggested that the possibility of interest rate cut by September was about 66%, and the rate cut this year was 43 basis points.
El Erian, Allianz's chief economic adviser, believes that the Federal Reserve officials, whether traditionally regarded as "hawks" or "doves", have recently shown a clear convergence when they sent signals to maintain high interest rates for a longer period of time. This consistency cannot guarantee that the economy and the market will be smooth from now on, because this is a period when confidence in the judgment and effectiveness of the Federal Reserve has been shaken.
El Erian said that, in fact, there are three outstanding risks. The first risk is related to the Federal Reserve's policy of "relying on data". In a world full of so many uncertainties, this passive approach is problematic. The second risk is that more and more companies are worried about weak consumer demand. The third risk is that the policy signal of the Federal Reserve is calibrated with the outdated inflation target of 2%. The current target of 2% may be too low.
Two Fed officials reiterated yesterday that interest rates will remain high for a longer period of time, stressing the need to be patient as the Fed waits for more evidence that inflation is falling.
Loretta Mester, President of the Federal Reserve of Cleveland, said at the symposium hosted by Raphael Bostic, President of the Federal Reserve of Atlanta, on Tuesday that she hoped to see "the inflation data of several months seems to be declining" before cutting interest rates.
Christopher Waller, the governor of the Federal Reserve, said on Tuesday that he needs to see further data evidence to prove that inflation is weakening before supporting interest rate cuts. Waller said, "In the absence of obvious weakness in the labor market, I need to see good inflation data for a few months, and then I can rest assured to support the stance of easing monetary policy."
Waller's comments were echoed Tuesday by other Fed officials, including Boston Fed President Susan Collins.
Collins said on Tuesday that she would like to see more evidence that price pressure is moving towards the Federal Reserve's goal of 2%. "I think this is a time for patience. I think the data is very complicated."
Collins said: "I think the data is very complicated... It will take longer than I thought before. We are in a very important period of patience."
Focus stocks
By Wall Street Goldman Sachs Nvidia, the leading AI chip stock that has been awarded the title of "the most important stock in the earth", will announce the first fiscal quarter of the company's fiscal year 2025 after the close of the US East Time on Wednesday, and provide future performance prospects.
This financial report of Nvidia is undoubtedly related to the belief of global technology stock investors in AI. Its financial report data and the approximate rate of its performance outlook for the next fiscal quarter directly determine the stock price momentum of global technology stocks in the short and medium term at least.
Tesla Sales in Europe fell to a 15 month low. The European Automobile Manufacturers Association said on Wednesday that the automaker registered only 13951 cars in April, down 2.3% year on year, the worst record since January 2023. On the contrary, electric vehicles in the whole industry increased by 14% that month.
Supermicro announced on Wednesday that several new models based on AMD H13 generation CPU server products. The new product is equipped with AMD EPYC 4004 series processors. Ultramicro will launch a new MicroCloud multi node solution, which can support up to ten nodes in the 3U form factor.
Apple For the fourth time in recent years, the company has hired a new director of diversity. The iPhone manufacturer strives to make its workforce more inclusive. Cynthia Bowman, a senior banker, will succeed Barbara Wye as Apple's vice president responsible for inclusiveness and diversity. Earlier this year, Bowman left after 17 years of work Bank of America , whose most recent position is Chief Diversity, Inclusion and Social Responsibility Officer.
Wednesday, US Eastern Time, Google 、Meta Platforms、 Microsoft and Saifushi It is committed to signing contracts for up to 20 million tons of high-quality carbon removal credits based on nature by 2030.
Amazon AWS, the cloud computing department, said on Wednesday that it would invest 15.7 billion euros (about 17.02 billion dollars) in the data center in Aragon, northeastern Spain, to greatly promote its expansion plan in Spain.
Amazon said in a statement that the new plan replaced the plan previously announced in 2021, when the company allocated 2.5 billion euros to Spain. Amazon said that by 2033, this investment will support local companies to create about 17500 jobs every year. Different cloud computing providers, such as AWS and Microsoft Azure, have been investing heavily in building data centers across Europe, and they used to be concentrated in the same region.
Snowflake's negotiation to acquire the startup Reka AI at a price of more than 1 billion US dollars broke down, and the company's idea of introducing more generative AI power into the company's interior came to nothing.
novo nordisk The building in Baxville, Denmark, caught fire.
Lululemon restructured the product and brand team.
Nikola announced 100 orders for hydrogen fuel cell electric vehicles.
Ericsson Expand smart factories in Texas.
Pinduoduo The revenue and adjusted net profit of the first fiscal quarter exceeded market expectations.
Vipshop Net revenue in the first fiscal quarter was lower than expected.
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